Asian stocks drift, dollar near nine-month high

TOKYO – Asian stocks drifted without clear direction on Monday after Wall Street’s sluggish performance late last week, while the dollar hovered near nine-month highs as fresh comments from a Federal Reserve official boosted bets of a rate hike by year-end.

South Korea’s Kospi .KS11 gained 0.5 percent. Australian stocks lost 0.6 percent, hurt by a decline in energy shares. The volatile Shanghai market .SSEC rose 1.2 percent, adding to Friday’s gains when it advanced on the strength of infrastructure shares.

Japan’s Nikkei .N225 treaded water and last stood little changed.

“There are few investors who want to chase the market higher until they see more news from overseas, especially those regarding a US rate hike,” said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo.

On Friday in Wall Street, the S&P 500 .SPX and the Dow .DJI were little changed and the Nasdaq .IXIC advanced as a record day for Microsoft (MSFT.O) and earnings from McDonald’s (MCD.N) helped offset a fall in energy and healthcare shares. [.N]

“It will be something of a hiatus week, given that next week brings the BoJ, Fed and BoE meetings…however there is a heavily back-loaded run of data in the US, Japan and euro zone, and there will be a deluge of US and indeed European and Asian corporate earnings,” wrote Marc Ostwald, strategist at ADM Investor Services International.

Global markets are bracing for a slew of data this week including consumer price data from Japan and some euro zone countries, third quarter US GDP and a number of purchasing managers’ index (PMI) data from developed economies.

In currencies, the dollar index .DXY was up 0.1 percent at 98.805 after touching 98.846, its highest since Feb. 3.

The US currency received a boost last week as the euro slid after the European Central Bank doused talk it was contemplating tapering its monetary easing.

The dollar was also supported by hawkish comments from Fed officials including New York Fed President William Dudley and higher expectations that Hillary Clinton will win the US presidential election, which have increased bets that the Fed will raise rates in December.

The dollar rose 0.1 percent to 103.960 yen JPY=. The euro slipped 0.2 percent to $1.0864 EUR= after falling on Friday to $1.0859, its lowest since March 10.

The Australian dollar was steady at $0.7608 AUD=D4. The offshore Chinese yuan CNH=D3 hit a new six-year low against a broadly stronger dollar. Crude oil prices slipped on concerns supply will outweigh demand, with US crude CLc1 down 0.5 percent at $50.62 a barrel.

The contracts had risen about 0.8 percent on Friday on hopes that Russia and OPEC would reach a price agreement, but worries of oversupply have been a persistent drag on the market. But oil fell Monday after Iraq said it wanted to be exempt from any deal by OPEC to cut production. Latest data also showed that US oil rig count posted the first double-digit rise since August to weigh on the market. Brent crude LCOc1 was down 0.3 percent at $51.61 a barrel.